Correlation Between Treasury Wine and Celsius Holdings

Can any of the company-specific risk be diversified away by investing in both Treasury Wine and Celsius Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Treasury Wine and Celsius Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Treasury Wine Estates and Celsius Holdings, you can compare the effects of market volatilities on Treasury Wine and Celsius Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Treasury Wine with a short position of Celsius Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and Celsius Holdings.

Diversification Opportunities for Treasury Wine and Celsius Holdings

0.26

Correlation Coefficient

Treasury Wine  Celsius Holdings

Modest diversification

The 3 months correlation between Treasury and Celsius is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings and Treasury Wine is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Treasury Wine Estates are associated (or correlated) with Celsius Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celsius Holdings has no effect on the direction of Treasury Wine i.e., Treasury Wine and Celsius Holdings go up and down completely randomly.

Pair Corralation between Treasury Wine and Celsius Holdings

Assuming the 90 days horizon Treasury Wine Estates is expected to generate 0.57 times more return on investment than Celsius Holdings. However, Treasury Wine Estates is 1.76 times less risky than Celsius Holdings. It trades about 0.01 of its potential returns per unit of risk. Celsius Holdings is currently generating about -0.05 per unit of risk. If you would invest  735.00  in Treasury Wine Estates on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Treasury Wine Estates or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Treasury Wine Estates  vs.  Celsius Holdings

Treasury Wine Estates

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Treasury Wine Estates has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Treasury Wine is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Celsius Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celsius Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Treasury Wine and Celsius Holdings

The main advantage of trading using opposite Treasury Wine and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine position performs unexpectedly, Celsius Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Celsius Holdings will offset losses from the drop in Celsius Holdings' long position.

The idea behind Treasury Wine Estates and Celsius Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.